2024 (11) TMI 1034 - HC - Income Tax

Assessee's challenge fails as undisclosed income from benami liquor vends confirmed under section 158-BB

Mange Ram Mittal Versus Commissioner of Income-tax, Hisar And Commissioner of Income-tax, Hisar Versus Mange Ram Mittal

Mange Ram Mittal Versus Commissioner of Income-tax, Hisar And Commissioner of Income-tax, Hisar Versus Mange Ram Mittal - [2025] 482 ITR 130 (P&H) Issues:1. Interpretation of Section 158-BB of the Income Tax Act for assessment of undisclosed income in search cases.2. Consideration of additional evidence and materials beyond what was found during the search operation.3. Fair hearing and opportunity provided to the assessee during the assessment process.4. Assessment of undisclosed income based on evidence of ownership and control of businesses through ghost and benami companies.5. Constitution of a special bench of three Judges by the President of ITAT.Detailed Analysis:1. The judgment involves the interpretation of Section 158-BB of the Income Tax Act regarding the assessment of undisclosed income in search cases. The appellant contended that the assessment should be limited to evidence found during the search operation only. The Tribunal interpreted the section to include both evidence found during the search and other materials available to the Assessing Officer related to such evidence. The Tribunal emphasized that the assessment should consider post-search inquiries and proceedings resulting from the evidence found during the search.2. The judgment addressed the consideration of additional evidence and materials beyond those discovered during the search operation. Various documents, partnership deeds, correspondence, and other materials were found during the search at the assessee's premises. The Tribunal found that the assessing officer could consider such materials if they were relatable to the evidence found during the search. The Tribunal concluded that undisclosed income could be assessed based on ownership and control of businesses through ghost and benami companies, even if licenses were not in the assessee's name.3. The judgment discussed the fair hearing and opportunity provided to the assessee during the assessment process. The appellant argued that the affidavit of employees was not considered, and fair hearing was not provided. However, the Tribunal noted that cross-examination of relevant persons was allowed, and the assessee had the opportunity to challenge the evidence presented. The Tribunal found that the assessment order was correctly reassessed by the three Judges Bench.4. The judgment analyzed the assessment of undisclosed income based on evidence of ownership and control of businesses through ghost and benami companies. The Tribunal considered various documents, statements of individuals, and agreements to conclude that the assessee had undisclosed income earned through such entities. The Tribunal rejected technical arguments regarding ownership of licenses and emphasized the substance of control and earnings.5. Lastly, the judgment briefly mentioned the issue of the constitution of a special bench of three Judges by the President of ITAT. The appellant did not press this issue during the arguments. The judgment dismissed both appeals, stating that the special bench had examined the case on facts, and no substantial question of law arose from the Tribunal's order. The dismissal was in line with the Supreme Court's ruling that pure findings of fact are not challengeable in appeals under the Income Tax Act.